Non-competition, Non Solicitation, and Confidentiality Agreement
An agreement for employees not to work for a competitor, not form a competing business, and to maintain confidentiality during employment. This agreement may or may not be enforceable depending on state law. Always consult an attorney before using this agreement to fit your current situation.
Note - All Clauses of this Agreement are optional and you can tie your employee to any of the particular clause without any of the others being used.
Note - when binding your employee to non competition clauses you have to be aware of what is generally perceived as a reasonable time to limit an ex-employee from competing with you. In general 2-3 years are the maximum time a court would allow you to bind an employee. In addition it is generally not perceived as reasonable to limit an employee from working or competing with you in a geographical area in which you do not offer services or goods.
Note - a non compete should only ever be used where the person is an employee or where there is a business to business joint venture. Where there is a contract for services i.e. where you engage a contractor to provide services if you use a non-compete there is a danger that person will be deemed to be an employee. The above clause should be deleted where you do not wish to employ the person being bound. The remainder of the document can however be used.
This Agreement (the "Agreement") is made effective as of [Enter Date] by and between:
[Enter Name and Business Address of the Company wishing to bind the Party] (the "Company"),
[Enter Name and Address of Employee] ( the "Employee"),
A. The Employee has been employed by the Employer as [Enter details of Employment e.g. a software developer]
B. The Company wishes to ensure it protects itself
THEREFORE in consideration of the premises, mutual covenants and agreements herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged the Company and the Employee (collectively “the Parties”) do hereby agree as follows:
1. DEFINITIONS. In this Agreement, unless the context otherwise requires:
(a) “Confidential Information” means any and all information that is or has been received by Employee from the Company or any of its Affiliates (collectively, the “Discloser”) and that:
(i) relates to the Discloser’s business, operations or activities; or
(ii) is designated by the Discloser as being confidential or is disclosed in circumstances where Employee would reasonably understand that the disclosed information would be confidential;
but excludes information that, without a breach of any obligation owed to the Discloser:
(i) is or subsequently becomes publicly available;
(iI) became known to Employee before the Discloser’s disclosure of such information to Employee, as evidenced by the Employee’s written records;
(iii) was disclosed by a third party having a lawful right to do so; or
(iv) was independently developed by Employee;
and, without limiting the generality of the foregoing, Confidential Information shall include trade secrets, data, reports, investigations, property inspections, research, projections, work in progress, designs, plans, programs, strategies, government filings and all other confidential concepts, know-how, methods of doing business, ideas, materials or information prepared or performed by or on behalf of the Discloser.
(b) “Customer” means (1) any person who was a client, customer or partner of the Company at the time of the termination of Employee’s employment; (2) any person who was a client or customer or partner of the Company at any time during the Employee’s employment; and (3) any person who was pursued by the Company as a potential or prospective client or customer or partner by way of any written submission made by the Company during the Employee’s employment.
2. NON-COMPETE. In consideration of being engaged as an employee by the Company, the Employee agrees that the Employee shall not, during the term of the Employee's employment with the Company and for a period of [Enter time period] year(s) beginning on such date of termination of employment without the prior written consent of the Company, carry on, or be engaged in, or be concerned with, or interested in, or employed by, any person engaged in or concerned with or interested in a business within [Enter Geographic Location of where restriction applies e.g. North America] which is the same as, or substantially similar to, or in competition with, the Company's business at the time of the termination of the Employee’s employment.
3. NON SOLICITATION OF CUSTOMERS. In consideration of being engaged as an employee by the Company, the Employee agrees that the Employee shall not, during the term of the Employee's employment with the Company and for a period of [Enter time period] year(s) thereafter directly or indirectly contact or solicit, or attempt to contact or solicit, any Customer of the Company for the purposes of:
(a) gaining the business of such Customer, or providing such Customer any products or services which are the same as or substantially similar to, or in competition with, the products or services sold by the Company at the time of the Employee's termination; or
(b) advising any person not to do business with the Company, or interfering in any way with the business relationship between the Company and any Customer, contractor, supplier or any other person with whom the Company has a business relationship during the term of this Agreement.
4. NON SOLICITATION OF EMPLOYEES. In consideration of being engaged as an employee by the Company, the Employee agrees that, during the term of the Employee's employment with the Company and for a period of [Enter time period] year(s) from such date of termination, the Employee shall not, directly or indirectly, approach, solicit, entice, or attempt to approach, solicit, or entice employees of the Company to leave the employment of the Company.
4. CONFIDENTIALITY. From the date hereof and for a period of [Enter time period] year(s) / hereafter (delete as applicable - choose hereafter if you want information to be confidential forever), Employee shall not, directly or indirectly, disclose or use Confidential Information for any purpose other than set out in this Agreement, except where:
(a) Employee has received the prior written approval of the Discloser to use or disclose the particular information in a manner not already expressly authorized by the terms of this Agreement;
(b) Employee is compelled to disclose the information by law or regulatory order, provided that Employee shall first notify the Discloser before such disclosure in order to give the Discloser a reasonable opportunity to seek an appropriate protective order and/or waive compliance with the terms of this Agreement and if Employee is still required to make a disclosure, Employee shall disclose only as much of the information as is required by law or regulatory order; or
Employee shall notify the Discloser in writing immediately upon discovery of any unauthorized use or disclosure of Confidential Information or any other breach of this Agreement and shall reasonably cooperate with the Company to regain possession of such Confidential Information and prevent its further unauthorized use or disclosure.
[Enter time period] business days of receipt of the Discloser’s request, Employee shall destroy or return to the Discloser all materials containing Confidential Information, and at the Discloser’s option, Employee shall certify that it has fully satisfied this request.
5. EQUITABLE RELIEF. Employee acknowledges and agrees that monetary damages may not be a sufficient remedy for a breach of this Agreement and that the Company shall be entitled, without waiving any other rights or remedies, to obtain injunctive or equitable relief for any breach or threatened breach of this Agreement.
6. ENTIRE AGREEMENT. The provisions herein contained constitute the entire agreement between the parties hereto and supersede all previous communication, representations, expectations, understandings and agreements whether verbal or written between the parties or their respective representatives with respect to the subject matter of this Agreement and shall not be modified or amended except by written agreement signed by the parties to be bound thereby.
7. SEVERABILITY. Should any part of this Agreement be declared or held invalid for any reason, that invalidity shall not affect the validity of the remainder which shall continue in force and effect and be construed as if this Agreement had been executed without the invalid portion and it is hereby declared the intention of the parties hereto that this Agreement would have been executed without reference to any portion which may, for any reason, be hereafter declared or held invalid.
8. NO WAIVER. No provision of this Agreement shall be amended, altered or waived except by a further written agreement, signed by each of the parties hereto. No waiver of any provision hereof shall operate as a waiver of any other provision or as a waiver of the same provision on any other occasion.
9. GOVERNING LAW. The provisions of this Agreement shall be governed by and interpreted in accordance with the laws of the county of [Enter County] and the State of California.
The Parties have executed this Agreement on the date first written above.
[ENTER COMPANY NAME]
[Enter Name of Employee]
This form has been prepared for general informational purposes only. It does not constitute legal advice, advertising, a solicitation, or tax advice. Transmission of this form and the information contained herein is not intended to create, and receipt thereof does not constitute formation of, an attorney-client relationship. You should not rely upon this document or information for any purpose without seeking legal advice from an appropriately licensed attorney, including without limitation to review and provide advice on the terms of this form, the appropriate approvals required in connection with the transactions contemplated by this form, and any securities law and other legal issues contemplated by this form or the transactions contemplated by this form.